Tuesday, October 04, 2011

Put this in the only-in-Washington file. The WSJ looks at the crazy logic of the Class Act which everyone, including the Obama administration, realizes is a fiscal abomination. This is the part of Obamacare for long-term coverage. The Democrats cynically gamed the CBO scoring system by collecting the money for five years before the benefits will be dispersed. Since the health care was only scored for ten years, this made it look like it was solvent and they just ignored what would happen after those ten years were up. The chief Medicare actuary warned about this a couple of years ago.

n one 2009 note, chief Medicare actuary Richard Foster—a martyr to fiscal honesty in the health-care debate—wrote that "Thirty-six years of actuarial experience lead me to believe that this program would collapse in short order and require significant Federal subsidies to continue." He suggested that Class would end in an "insurance death spiral" because the coverage would only be attractive to sicker people who will need costly services. It could only be solvent if 230 million Americans enrolled, which is more than the current U.S. workforce.

An HHS Office of Health Reform official, Meena Seshamani, rejected Mr. Foster's critique because "per CBO it is actuarially sound." But of course CBO only scores what is presented to it, no matter how unrealistic. Despite this false reassurance, later even one HHS political appointee took up Mr. Foster's alarms, writing that Class "seems like a recipe for disaster to me."

The Obama administration is basically admitting that the whole thing is a disaster and has disbanded the office that is supposed to be working on the thing.

So shouldn't this be easy to repeal?

Well, no. The whole thing is so phony that the Republicans are wary of repealing it because of the way it has been presented with the five years of collecting money before having to pay out benefits make this look, on paper, like it's trimming the deficit. So repealing it would, on paper increase the deficit.

Some Republicans are also nervous about repealing Class because, under CBO's perverse scoring, they'll be adding $86 billion to the deficit. Others would prefer not to repeal any of ObamaCare until they repeal all of it, on grounds that some of it might survive if the worst parts go first.

So an unaffordable entitlement that will be a perpetual drain on taxpayers may continue to exist because of a make-believe budget gimmick that everyone now admits is bogus. Congress can't reduce real future liabilities because it would mean reducing fake current savings.

This is literally insane. It's rare to get a political opening to dismantle any entitlement, much less one as large as Class. House Republicans ought to vote to repeal it as soon as possible as an act of fiscal hygiene, forcing Senate Democrats to vote on it and President Obama to confront (even if he won't acknowledge) the fraud he signed into law.

And you can just bet that, if the Republicans voted to repeal this fakery that will soon become a disastrous financial liability, the Democrats would accuse them of raising the deficit because they know the whole thing is so convoluted that few people will understand what is really going on.